6 Businesses With the Lowest Failure Rates

Starting a business is always a risk, but some industries have proven to be safer bets than others. Here are 6 types of businesses that statistically have the lowest chances of failing within the first few years:

1. Laundromats

Failure Rate: 5-7%

Laundromats have one of the lowest failure rates of any industry. According to industry estimates, around 93-95% of laundromats are still operating after 5 years.

Reasons for Success:

• Simple, established business model
• Recession resilient – people always need clean clothes
• Low startup costs
• Mostly passive management with machines doing the work

Laundromats provide stable, recurring revenue streams with minimal hands-on involvement needed. An accessible entry point for beginning entrepreneurs.

2. Rental Property Businesses

Failure Rate: 15%

Owning and managing rental properties like houses, apartments, storage units, etc. have proven to be solid investments over decades.

Reasons for Success:

• Tangible assets that hold value
• Monthly cash flow from tenant rents
• Leverage from mortgages to buy more properties
• Tax advantages like depreciation and 1031 exchanges
• Ability to scale with hiring property managers

Real estate investing takes some learning but established models exist for acquiring and managing properties successfully.

3. Self Storage Facilities

Failure Rate: 8%

Self storage enjoys one of the lowest failure rates in the real estate sector. The self storage industry has expanded rapidly in recent years.

Reasons for Success:

• In-demand offering with ecommerce driving need for storage
• Technology enables remote management without staff
• Tenants pay rent reliably via automatic credit card payments
• Low maintenance compared to housing rentals
• High occupancy rates and profit margins

A proven hands-off business model that generates reliable revenue.

4. Transportation/Delivery Businesses

Failure Rate: 24%

From long-haul trucking companies to Uber drivers, the transportation industry overall has better-than-average survival rates.

Reasons for Success:

• Established routes/customers in many cases
• Essential services that see consistent demand
• Low startup costs for those joining existing platforms like Uber
• Designatable assets like vehicles retain resale value

Easy business model to start part-time or as a side-hustle. Opportunities to evolve into a full fleet provider over time.

5. Vending Machine Routes

Failure Rate: 10-20%

While vending machine businesses require some effort, they produce reliable cash flows over time with minimal overhead.

Reasons for Success:

• Low startup costs – used machines available or lease options
• Place and collect money from machines with little supervision
• Passive income stream once machines are installed and supplied
• Easy to start part-time and retain a job while testing concept
• Ability to scale by adding machines and routes

One of the most accessible low-cost business models. Ideal for side income and gaining experience.

6. Senior and Assisted Living Facilities

Failure Rate: Unknown, but estimated to be low

Though statistics are hard to find, senior care is reputed to have lower failure rates due to steady demand growth and government assistance.

Reasons for Success:

• Rapidly growing senior population requiring care
• Government programs help subsidize costs
• Can start small then expand services over time
• Caregiving services less vulnerable to economic fluctuations
• Increasing social acceptance of external care options

An in-demand market with room for specialization – memory care, home health, etc. Oversight requirements vary by state.

Final Takeaways

• Research credible failure rate statistics before committing to any business. Many factors influence success rates.
• There will always be some element of risk, so manage finances prudently.
• Gain experience with a “starter” business before attempting larger ventures.
• Execute well – proven models still fail due to poor management. Stay organized and attentive.
• Failure in business happens – learn from mistakes then try again or pivot.

Every business requires hard work and adaptability. But choosing one with a track record of stability can put the odds of success distinctly in your favor.